Good morning
The headlines:
- There’s this soccer player called Ibrahimovic whose new salary at Paris Saint-Germain is going to trigger the 75% French tax.
Link: Work hard, play hard, die hard.
I’m not sure why this is news. French soccer players should definitely pay more tax. Because, you know, they’re a luxury good.
I’m sure that’s a reasonable argument for a 75% tax rate.
Sarcasm: it’s the lowest form of wit. I reserve it for the highest type of tax.
- A shipwreck yields $38 million worth of silver.
Link: treasure hunting.
There’s a World War II ship in the Atlantic, sunk 4.8km below the surface, from which a deep-sea exploration company has recovered 48 tonnes of silver*. It’s said to represent only 20% of what’s actually on the ship.
How exciting!
Sadly, Odyssey, the exploration company in question, is making quarterly losses.
How much does it cost to recover $38 million worth of silver from 4.8 km under the sea? By my calculation, about $54 million**.
Someone should tell them to stop.
*Sometimes, I see numbers like 4.8 and 48 occurring next to each other – and it looks like proof of order in the Universe. That, or an editorial fail. Probably that, now that I think about it.
**given that their loss in the last quarter was $15.6 million.
- Apple to engage in a little Samsung advertising.
Link: sometimes, it sucks to be too cool.
Apple has now been ordered to tell everyone that because it’s so much cooler than Samsung, Samsung obviously didn’t copy the iPad design.
On the Apple website. For the next six months.
Any bets on how much it burns to advertise your competitor on your website?
- The US public pension shortfall of $4.6 trillion.
Link: and who covers that, we wonder.
Alright – so those are figures prepared by an advocacy group. Which makes them about as reliable as Windows with more than one program open: ie. a good chance that they’re a fail.
But the point is – the way that these things are supposed to work – the US and the working population pay their pension contributions every month***. These then go into an investment fund that becomes the “plan asset”, whose growth is meant to align with the “pension fund liabilities” (the obligation of the pension fund to payout your pension when you retire for however long you live after retirement, etc).
If the State guarantees that you will be paid a certain amount of pension out****, and the plan assets don’t do as well as expected, then there is “underfunding”. That is: the plan assets don’t cover the plan liabilities. Which is not really ideal.
Particularly when that shortfall is $4.6 trillion. Because now the State (read: the taxpayer) is obligated to step in and cover the shortfall.
Or would it though? As demonstrated in the fiscal cliff article, American taxpayers don’t seem to pay for much. Which leaves what options open?
Either borrowing, or printing money, or both. As the US prints money, you would expect it to inflate, and you would expect the currency to devalue. The two go hand-in-hand.
What is happening? The dollar is strengthening. But the money is being printed, and more debt is being sold. Which suggests that if the US weren’t printing money, then the US dollar would be appreciating rapidly. But it isn’t – because global demand for the currency is eating up the dollars as fast as the US can print them. Leaving the dollar relatively stable.
And WHO is forgoing this appreciation relative to other currencies?
Us foreigners are.
I think that, um, the world is covering the US public pension shortfall.
Now isn’t that interesting.
***The standard – both you and your employer and possibly the State put money in for your pension.
****Referred to as a “Defined Benefit Plan”. As opposed to a “Defined Contribution Plan”, which just has certain contributions that the employer/State contributes every month – after which they no longer have anything to do with your pension.
And on that bombshell – that’s all for now.
Have a good day.
